Yida China Holdings Limited Arbitration Consent Solicitation

Yida China Holdings Limited Arbitration Consent Solicitation

After finalizing a proposal with its financial advisor to resolve a put option under $224.9M 14% notes Due 2022, exercisable on March 8, Yida China is launching a consent solicitation for a waiver of their arbitration award as well as a reduction of their coupon rate. The waiver of their arbitration award was constituted by a default clause stating that any judgment against the company that exceeds $15 million and is not paid within 90 consecutive days will allow for a waiver. Since the arbitration award against Yida China was not paid in the decided 90 days it was able to be waived. Yida China will also be amending their repayment schedule as a result of the default and if the consent solicitation is lapsed, Yida might not have sufficient funds to settle the put option exercisable on March 8. To read our full analysis of the situation as well as the amended repayment schedule click here: https://reorg.com/update-1-yida-launches-consent-solicitation-to-waive-default-reduce-coupon-amend-repayment-schedule-under-224-9m-14-senior-notes-due-march-27-2022-to-pay-2-consent-fee/ 
Podcast: Abengoa Concurso Filing; MAB High Court Precedents

Podcast: Abengoa Concurso Filing; MAB High Court Precedents

Released bi-weekly, the EMEA Core Credit podcast focuses on European, Middle Eastern and African situations and companies in the distressed and high-yield space. Each episode also features a deep dive into a particular company or issue, discussing their developments and state of affairs in their respective space. This week, Richard Woolly speaks with the EMEA Core Credit legal team to discuss developments affecting schemes of arrangement and part 26a restructuring plans.  The deep dive this week focuses on Spanish construction and engineering company, Abengoa and their restructuring agreements as well as the precedents set by MAB Leasing, a subsidiary to Malaysia Airlines, in the English High Court. Click through to listen to the full episode on Apple Podcasts, SoundCloud or Spotify.

China Fortune Land Development Principal Payment Extension

Vocalizing a preliminary debt settlement plan for all of its outstanding onshore bonds to certain bondholders, China Fortune Land Development (CFLD) may extend their principal payment by three to five years with no upfront cash payment or credit enhancement. In order for these extensions to occur the industrial park and property developer will need to negotiate the terms with bond holders in the coming weeks. Although the negotiations are pending, there is concern coming from bondholders about the long principal extension period and about a lack of asset disposal plans due to the absence of upfront payments or credit enhancements.  Bondholders will also be meeting Friday, Feb. 26, to discuss five mutually exclusive proposals that have been submitted on cross defaults, put options and waivers of the cross defaults on certain conditions. Our Asia Core Credit team has broken down the situation on China Fortune Land Development as well as the company’s capital structure in relation to the negotiations. Read our full analysis here: https://reorg.com/cfld-preliminary-debt-settlement-plan-for-all-onshore-outstanding-bonds/ 
Priority Technology Holdings Term Loan Facilities Amendments

Priority Technology Holdings Term Loan Facilities Amendments

Priority Technology Holdings Inc., an integrated payment software and commercial payment services provider based out of Alpharetta, GA, began to amend their senior term loan and subordinated term loan facilities in mid-March of 2020, but these amendments may hold back the company’s ability to grow through continued acquisitions. Their two owed term loan facilities are under separate credit agreements with multiple borrowers and guarantors including Pipeline Cynergy Holdings LLC, Institutional Partner Services LLC, Payment Systems Holdings LLC and Priority Holdings LLC. Priority Technology Holdings Inc. has previously been able to grow through acquisitions of whole companies and merchant portfolios, but with the amendments made in March 2020 the company now has limited covenant relief. The amendments to their credit agreements made a few notable changes to their pricing / PIK premium, amortization of senior term loans, renewed call protection, restrictions on transfers of material intellectual property, removal of leverage-based baskets for stock buybacks and leverage-based conditions for accessing transaction baskets. Our Americas Covenants team broke down these amendments and came to a few covenant conclusions about Priority Technology Holdings’ liquidity and financial covenants, their debt and liens and the company’s dividends and transfers to unrestricted subsidiaries. Read our full analysis of the situation here: https://reorg.com/direct-lending-march-2020-term-loan-amendments-may-curb-priority-technologys-ability-to-grow-through-continued-acquisitions/   
Fourth Quarter Earnings Recap: Week of Feb. 22 2021

Fourth Quarter Earnings Recap: Week of Feb. 22 2021

Fourth-quarter earnings season got underway in Europe under a cloud of sluggish business activity and delays in Covid-19 vaccinations across the continent. Travel and associated industries have reported tough periods - exemplified by Heathrow, once Europe’s busiest airport, saying this week that 2020 was the toughest year in its history - while companies in other sectors, including retail and automotive, posted better-than-expected results. Investors are nevertheless optimistic about the reopening of travel in the coming months with aviation and leisure debt already being lifted on positive noises from governments. Next week Jaishree Kalia, Reorg’s Managing Editor of EMEA Middle Market, will be leading a webinar on the current outlook for European mid-market lending and how the impact of Covid-19 has shaped winning and losing sectors this year. Sign up for our weekly updates here

Paragon GmbH & Co KGaA Liabilities and Bonds

New coverage from our EMEA Middle Market by Reorg team takes a look at Paragon GmbH & Co KGaA and their bond’s recent double digit rise as well as the company’s plans to repay their liabilities and invest in the automotive business. Paragon, a German automotive supplier, has recently sold a stake in its subsidiary Voltabox which has given investors reason to monitor the company’s bonds. Since the beginning of February the Swiss Franc bond rose to 55, while the Euro bond gained 15 points to rise to about 75. These bonds are hardly trading, but a Swiss investor in Voltabox may reach up to 32% of the company’s share capital ownership as they look to purchase more than 18% of Voltabox’s shares upfront. Paragon expects to retain a small stake of Voltabox for some time before exiting the investment completely, but the asset sale proceeds will be used to invest in the automotive business and repay liabilities.  The company had a bumpy 2020 in terms of financial performance. In the first three quarters Paragon had an 11.6% year-over-year decline in revenue, pushing the company down to €83.84 million. The company’s EBITDA also fell to €7.5 million, which was a 11.2% decrease. These decreases were mainly driven by six-week automotive plant closures in the first and second quarter of 2020 due to Covid-19. Read our EMEA Middle Market by Reorg team’s full analysis of the Paragon situation here: https://reorg.com/investors-monitor-paragon-bonds-ahead-of-voltabox-stake-disposal/
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